LENKOR ENERGY TRADING DMCC v IRFAN IQBAL PURI

A freezing order supporting enforcement of a foreign judgment remains concerned with preserving assets, rather than execution, until the foreign judgment has been converted into an enforceable English judgment. In that situation, the ordinary-course-of-business exception should not ordinarily be removed. Applications to use information obtained under the order for enforcement, and applications concerning fortification of the cross-undertaking, may likewise be premature or insufficiently supported.

An application for a bankers’ books inspection order is not premature merely because judgment has not yet been obtained. The court may order disclosure during litigation, but must proceed cautiously, require relevance and sufficiently established grounds, avoid oppressive or fishing exercises, define the documents and period sought, and generally limit orders against banks to material held within the jurisdiction.

The claimant obtained a judgment in Dubai for approximately £26 million and commenced a common-law debt action in England to enforce it. Earlier English orders included a freezing injunction, with an exception allowing the defendant to deal with assets in the ordinary and proper course of business, and a requirement to fortify the claimant’s cross-undertaking in damages.

The claimant applied to remove the exception, discharge the fortification requirement, obtain permission to use information for enforcement, and secure bank statements through the bankers’ books inspection regime. The central issue was whether those applications could properly succeed before an enforceable English judgment existed.

1. Angel Bell exception. The application to remove the ordinary-course-of-business exception was refused. Although post-judgment freezing orders may facilitate execution, no enforceable English judgment yet existed. The order therefore remained an asset-preservation measure, analogous to a freezing order supporting an arbitration award before conversion into an English judgment. The exception was retained, while the defendant remained required to notify the claimant of proposed expenditure.
2. Fortification. The requirement to fortify the cross-undertaking in damages was maintained. The claimant’s argument assumed that the Dubai judgment would be enforced, which was not yet established. There was also insufficient material to show that the existing £100,000 estimate of possible loss should be altered, notwithstanding the judgment in Energy Ventures Partners Ltd v Malabu Oil and Gas Ltd [2015] 1 WLR 2309.
3. Use of information. Permission to use information obtained under the freezing order was limited to steps connected with English enforcement and was refused as premature because no enforceable English judgment had yet been obtained. The position could be reconsidered after an English judgment.
4. Bankers’ books inspection. The defendant’s objection that the application was premature was rejected. The relevant statutory regime imposed no requirement for an existing enforceable judgment, and applications could be made during litigation. An order was therefore appropriate for identified accounts, subject to safeguards: caution in imposing burdens on non-parties, clear relevance, avoidance of oppression and fishing, a defined period, and limitation to English branches of English banks. The proposed order was too broad insofar as it sought early records and general disclosure concerning unidentified direct or indirect accounts.
5. The parties were directed to liaise on an order giving effect to the judgment.